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State looking at $1.6 billion shortage to maintain current services

SALEM — With about a month to go before a critical revenue forecast, Oregon's budget writers released a more detailed list of cuts Monday to address the state's approximately $1.6 billion budget gap if new revenue isn't raised.

The cuts are across the board and intended to show what it would take to balance the state's budget. For example, about 350,000 Oregonians would no longer be eligible for coverage under the recent Affordable Care Act Medicaid expansion, and a ballot measure to require the state to pay dropout prevention, college readiness, and career and technical education for high school students would only be partially funded.

The co-chairs of the Joint Committee on Ways and Means released a similar document in January, with fewer specifics. Since then, subcommittees have been working on different areas of the state's budget to figure out where agencies and programs could be cut to make those targets.

Lawmakers face an approximately $1.6 billion gap between what the state is expected to realize in revenue and what it would take to pay to maintain existing services.

"The goal of the list is to move the process along, " said Speaker of the House Tina Kotek, D-Portland. She also said it was intended to "educate" the public and the legislative assembly about the choices lawmakers will have to make in order to eliminate the shortfall.

"It's definitely a wake-up call," Kotek said. "If you look at those reduction lists, Oregonians are going to see things that they care about on those lists. And without new revenue, we don't have a lot of options."

Kotek said that conversations about a tax on health care providers were "ongoing," but that the list of cuts released Monday does not include that or any other new revenue proposals. A group of legislators from both parties and chambers is meeting privately to hash out a possible consensus on business taxes.

Senate Minority Leader Ted Ferrioli, R-John Day, claimed in a statement that Democrats were presenting a "false choice of either accepting unconscionable cuts...or raising taxes."

In November, voters rejected a proposed gross sales receipts tax on certain corporations, Ballot Measure 97, which was projected to raise $6 billion in new revenue for the state's upcoming two-year budget. In its wake, some of its opponents have called for addressing the costs of the state's public employee pension system and other long-term cost drivers first.

Kotek said that the list of possible reductions did not address Oregon's budget in the longer term — merely the two years of the next budget cycle, which begins July 1.

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